IVRCL ups turnover target by 20%

Company, buoyed by better than anticipated orders, raises turnover target to Rs 1,200 cr

City-based IVRCL Infrastructures and Projects Limited has upped its revenue guidance for the year by 20 per cent.

Riding on better than anticipated order wins, the company has raised its turnover target to Rs 1,200 crore as against the Rs 1,000-crore turnover it expected to achieve for the financial year 2004-05.

The company's current order book position is at Rs 1,695 crore of which water supply projects account for Rs 988 crore, building construction Rs 326 crore, road projects Rs 336 crore and power projects Rs 45 crore.

R Balarami Reddy, director (finance) of IVRCL Infrastructures, said that around Rs 1,100 crore would accrue from the orders on hand, while the remaining Rs 100 crore income would be contributed by the new projects the company would get to undertake during the current financial year.

He said that the company had bid for projects worth Rs 2,800 crore during the past three months. The bid results were expected to be announced in a month, he said.

Reddy said that the company expected to record higher profits because of savings on interest and material costs.

He said IVRCL expected to save Rs 6 crore by swapping high interest debt contracted at about 12 per cent with low interest debt of 8 per cent this year.

The interest outgo for the company during 2003-04 was Rs 17.55 crore. During the last financial year, the total loans amounted to Rs 165 crore, inclusive of Rs 100 crore loans secured during that year.

This was also the reason the company incurred higher interest and financing costs at Rs 21.98 crore, an increase of 82.5 per cent over Rs 12.04 crore.

The IVRCL director also said the company was likely to leverage its better financial position to get better terms from material suppliers.

The company had following infusion of capital from Citicorp International Finance Corporation and Chrys Capital II, LLC, Mauritius raised Rs 78 crore. The move propped up the networth to Rs 214 crore from Rs 102 crore.

"We're now in a better position to bargain with material suppliers as we can pay cash upfront and get better discounts," Reddy said.

Last financial year, the company achieved a total income of Rs 775.56 crore, an increase of 75 per cent over the Rs 441.4 crore during 2002-03. It earned Rs 250 crore from the Rs 315-crore Veeranam project for Chennai city water supply alone. The project is likely to be completed by July-end.

The profit after tax rose by 152.6 per cent to Rs 39.18 crore in 2003-04 from Rs 15.5 crore in the previous financial year. Excluding an extraordinary item of Rs 8.80 crore, the net profit grew by 41.24 per cent to Rs 33.9 crore from Rs 24 crore.

Expecting tax benefits for some its projects, the company has written back the excess provision for income tax for the earlier years amounting to Rs 8.80 crore.